In Re: Alleged bid-rigging in E-Tenders invited by the Department of Agriculture,

Government of Uttar Pradesh for soil sample testing

The Competition Commission of India (CCI) vide Order dated 4th April 2022 penalized nine
entities (collectively known as OPs) for contravention of the provisions of Section 3(3)(c)
and Section 3(3)(d) read with Section 3(1) of the Competition Act (Act). Further, five
individuals of the OPs are found liable in terms of Section 48 of the Act, for the anti-
competitive conduct of their respective entities.

The information arises out of a general complaint dated 07.08.2018 received by the
Commission alleging bid-rigging in two tenders invited by the Department of Agriculture,
Government of Uttar Pradesh for soil sample testing in Moradabad and Bareily. The Hon’ble
Commission passed an order dated 30.01.2020 under section 26(1) of the Act, directing
Director General (DG) to initiate an investigation and submit the report in the matter and
prima facie held that the OPs appear to have manipulated process of the bidding in the soil
testing tenders.

In its investigation report, DG found out that a common IP address was used for submission
of e-bids by the OPs. DG investigated details of nine tenders where OPs had participated
earlier. The login ID used by one of the OP to submit the bids in the Bareily and Moradabad
tenders for the year 2018 also belonged to one of the other OP. It was also clear that OPs had
submitted cover bids using fake documents provided by OP-1. It revealed that three entities
had no prior experience of soil testing before they submitted for Jhansi and Meerut divisions
for the year 2017. The entities did not fulfil the terms conditions of the said tender.

The entities and individuals involved objected that DG has not demonstrated any instance of
meeting of mind, conspiracy to gather undue market power or intent to fix prices/limit output
between various unconnected and competing enterprises and did not earn any profit for the
relevant period/relevant market.

Upon commencement of analysis, CCI notes that the individuals involved could not come
forth with any justifications as to why false certificates were issued by OP-1. Even fake
experience certificates were issued by OP-1 to OP-2 and OP-3 which bore same date despite
the fact that those entities never had any soil testing experience or experience of working on
ICP-OES machine. It was also noted that fake invoices of purchase of the ICP-OES machine
for tender from 2018 were submitted by OP-4, which had no experience or infrastructure to
participate in a soil testing tender in 2018. It solely participated in the bid for providing cover
bids in support of OP-1. It was also found that OP-3 and OP-2 were blacklisted by
Department of Agriculture, Uttar Pradesh and yet participated in the bidding with fake
documents. The Commission was of the view that OP-5, under an arrangement with rival
company OP-1 had geographically allocated soil testing tenders issued by the Department of
Agriculture, Government of Uttar Pradesh in 2017 and 2018 by not bidding in each other’s
allocated regions and by submitting supporting bids in favour of each other.

In sum, CCI was of the view that the OPs were indulged in the anti-competitive conduct and
manipulating the bids/bid rigging in respect of the tenders floated by the Department of
Agriculture, State of Uttar Pradesh and certain parties had produced fake invoices and
certificates for making some of the OP eligible for participating in bid so as to effectively act
as cover bidders in respect of winning bidders. The Hon’ble Commission decided to impose
penalty under Section27(b)of the Act of @5% of the average of entities’ turnover and under
section 48 of the Act of @5% of respective individual’s average income for three financial
years, i.e 2017-18, 2018-19 and 2019-20.

Therefore, CCI imposed a fine on Yash Solutions of Rs. 84,31,706, M/s Satish Kumar
Agarwal of Rs. 15,59,451, M/s Siddhi Vinayak and Sons of Rs. 12,62,007, M/s Saraswati
Sales Corporation of Rs. 6,66,975, Austere Systems Pvt. Ltd. of Rs. 44,25,569, Delicacy
Continental Pvt. Ltd of Rs. 32,99,405, Fimo Infosolutions Private Limited of Rs. 36,442, M/s
Toyfort of Rs. 12,27,472, Chaitanya Business Outsourcing Pvt. Ltd. of Rs. 10,12,323, Mr.
Praveen Kumar Agarwal of Rs. 1,49,265, Mr. Rahul Gajanan Teni of Rs. 44,712, Mr. Ankur
Kumar of Rs. 19,307, Mr. Jai Kumar Gupta of Rs. 21,447 and Mr. Nitish Kumar Agarwal of
Rs. 84,541. The Commission directed the concerned parties to deposit the aforesaid penalty
amounts within 60 days of the receipt of the order.